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Military retirees and veterans on disability will receive the same 2.5% cost-of-living adjustment in 2025 that federal officials announced last week for Social Security recipients.
Last year, the increase was 3.2%. In 2022, the boost was 8.7%, which was the largest in 42 years. The trend reflects a cooling of inflation.
The Social Security Administration determines its COLA by using the Consumer Price Index for Urban Wage Earners and Clerical Works, which tracks a broad sampling of costs like rent, groceries and utilities over time.
Some advocates for retirees believe the CPI-W — which doesn't survey the cost of retired households over the age of 62 — isn't an accurate reflection of the inflation rate older Americans face.
The Consumer Price Index for the Elderly has consistently run higher than the CPI-W in recent years, in part due to rising health care costs.
COLAs aren't pay raises. These adjustments merely help retirement benefits keep pace with inflation.
In years when there are no increases in the CPI-W, there are no adjustments.
Military retirees by law automatically receive the same COLA as Social Security recipients.
But Congress must act annually so veteran payouts will keep pace with inflation. Lawmakers did so late last month.
Those in uniform will see an even greater increase in their pay next year, at least 4.5%. The higher percentage is due to pay each year for military members and federal employees being part of the annual budget cycle, and not determined by the inflation rate.
President Joe Biden asked for a 4.5% pay increase for those in the military in his fiscal defense budget request.
Lower enlisted personnel will likely see more than 4.5% depending on the result of negotiations later this year between the House and Senate on the fiscal 2025 National Defense Authorization Act.
The House position raises pay up to 19.5% for troops E-4 and below. The Senate wants to provide a 5.5% pay raise for E-3 and below.
Federal employees are looking at an average 2% pay hike, which was also the president’s budget request.
The pay raise in fiscal 2024 for both service members and federal employees was 5.2%.
Some veterans and military retirees will see the 2025 Social Security COLA increase in their December checks.
About 7 million retirees and veterans receive benefits checks monthly.
— By John Goheen
